How Artificial Intelligence and the Ageing Population Will Affect the Future of Work

Artificial Intelligence. It’s the buzzword on everyone’s lips, and every other conversation about work tends to shift towards robots and how they’re coming for all of our jobs—not just the highly repetitive or low-skilled ones. As Indeed’s Chief Economist, Jed Kolko, has a superpower of sorts—he can see into the future. Well, kind of. Privy to a wealth of data about the labour market, he gets a unique insight into employment trends as they unfold and often before they’re apparent to the rest of us.

Jed took time out of his recent trip Down Under to discuss the biggest challenges facing both job seekers and employers, the ageing workforce, his first job (which no longer exists), and how he’d navigate a conversation with his ten-year-old self about what he wants to be when he grows up.

Indeed’s mission is ‘We help people get jobs’. How do you help people get jobs?

We [the team of economists at Indeed] help people get jobs by helping them to be better informed about what’s happening in the labour market. We help job seekers understand where the opportunities are, and help employers understand what the workforce looks like.

Why do you think people are so scared of automation? It’s not a new phenomenon.

There have been major technological breakthroughs around machine learning that enable computers and algorithms to do a certain set of tasks that are an important part of so many jobs. Detecting patterns, organising huge amounts of data into categories; these are things that people in lots of different kinds of professions do, whether it’s radiologists, or office and clerical workers. It’s not just factory jobs. In fact, the majority of jobs in occupations that are predicted to shrink in the next ten years are service jobs.

In the US there’s already been such a shift away from traditional manufacturing jobs at this point, that most of the jobs that are risk are service jobs.

Overall, I think the anxiety has less to do with the speed of the change that’s happening and more to do with the way that change is being managed.

The tasks that machines are better at seem largely to be boring and repetitive ones. Where are the opportunities?

I think there are three areas where opportunities lie.

One is more specialised kinds of jobs that are difficult for machines to replace. Technical jobs that require an understanding of why some things cause other things and require a lot of experiential knowledge. That’s harder to replicate with machines. Lots of management jobs that often require judgement about teams and people, things are very difficult to quantify or reduce to an algorithm.

Secondly, direct personal service jobs such as those in health care. They are in enormous demand as the population ages and aren’t the kind of roles that machines can replace.

The third area of opportunity are jobs that are created by increasing automation. Not just jobs that involve building AI, but monitoring, auditing and supervising the algorithms that we’ll increasingly see and the kinds of predictions and classifications that they’re making. So that’s a whole new set of jobs. It’s very hard to know what those jobs will look like, how many there will be, and what kinds of skills they’ll require.

It’s much easier to imagine the jobs that exist today that might be threatened than it is to imagine the types of jobs that don’t exist today and might emerge.

What’s the biggest challenge facing job seekers today?

People who are in jobs that are at risk of being automated and may have to make transitions to new careers and to new locations. A lot of these people are older workers who are already invested in skills that might be less in demand. I think that’s one of the biggest challenges.

The effect of automation is uneven. There are some types of people that are more at risk than others. Those with less education are often in jobs that are more likely to be automated. In the US [as with Australia] there’s a strong geographic component as well. Jobs more at risk of automation tend not to be in big cities. They tend to be in smaller towns and rural areas.

What’s the biggest challenge facing employers?

The market is quite tight. In the US, we have the lowest unemployment rate that we’ve had in 17 years. There’s pressure on employers to raise wages. They’re looking more broadly for workers because they’re harder to find and easing up on some requirements for jobs, such as uni degrees. Certain types of skills might be hard for employers to insist on in such a tight market.

How do you explain the strong company profits yet a lack of wage growth that we’re experiencing in Australia?

Wages tend to rise in the long run in a similar rate to productivity, and productivity is increasing less now than it used to. That might be one reason as to why they’re not rising in this tight labour market as they have in the past.

Why is the productivity rate not increasing?

That continues to be a big debate among economists. Even though we perceive so much technological change, it may be that technology is adding less to productivity than it used to. Also more of the economy now is in sectors with slower productivity growth.

Is technology taking away from productivity in terms of pure distraction?

Probably not on balance. When we think broadly about technology, all the ways in which we can process enormous amount of data, communicate without having to be somewhere in person— that has to outweigh the ways in which technology might sometimes slow us down as individuals.

What did ten-year-old Jed want to be when he grew up?

I actually wanted to be something pretty similar to what I am now, I wanted to be a demographer. I was always fascinated by different places and how different people ended up where they did. I grew up in a small city in upstate New York near Canada, and always wanted to end up in a larger place. I just had this sense that there were bigger places out there.

What was your first job?

My first job is one of the jobs that has been automated away entirely. In high school, I worked for a local politician in the state government. My job was to read print newspaper articles for any time she was mentioned and would cut them out for her files. I was a human Google news alert!And that’s surely a job that no longer exists.

In light of broader discussions about training for particular skills vs occupations, what would you tell ten-year-old Jed about the future of work and his career opportunities?

The rate of change in the labour market right now is slower than it’s been at many times in the past. The rate at which jobs are disappearing or emerging (in the US anyway) is much slower than it was in the 1940s and 50s. It’s very hard to be in the midst of change and be able to compare it to previous eras.

The decline in agricultural jobs, the demise of many types of office work, the decline in manufacturing employment: these are all huge trends that caused dislocation and so far are bigger changes than anything we’ve seen recently that’s arisen from recent changes in technology.

Kids should dream big. A ten year old is not going to make some decision that will limit them later on. Even if a ten year old has their heart set on something that turns out not to exist twenty years on, they’ve still got plenty of time to pick another path.

Is there a key skill or vocation we should be upping our proficiency in?

There seems to be a rush toward ‘the’ skill or job that will be in demand next, which makes people lose sight. The sexy crowds out the unsexy: most workers don’t need data science or machine learning skills, but rather more basic skills like familiarity with spreadsheets and shared calendars. There are a lot of spuriously precise forecasts out there.

Everyone’s talking about youth unemployment, but we have an ageing population in Australia and with people living longer—how can we continue to engage them in the workforce?

The biggest needs are definitely around the ageing population. First of all helping people transition to other kinds of work if they’ve been in an occupation that’s declining. The other is, thinking more flexibly. Employers might have to be more flexible about how jobs are defined.

Employers who are willing to have older adults work part time, remotely or for part of the year may be able to attract people who are in their 60s and 70s—who will be an increasing share of the workforce—who aren’t ready to retire, but would gradually pull back.

What’s the best part about working at Indeed?

Firstly the mission—helping people get jobs is an incredibly compelling mission.

Second is the people. The Hiring Lab team is a creative and thoughtful team that are dedicated to helping lead the global labour market conversation and also approach research with incredibly high integrity.

It’s amazing to be able to use our data and to see all of the things we can from all of our job postings and all of the search behaviour we see onsite. We get to see so many labour market trends before anyone else does.

What’s your top tip for visitors to Sydney?

Eat! I always do a lot of research before I visit a place and on my list of things to do are drink coffee, eat Thai food, and try some regional Chinese food that’s harder to find in the US.

What’s the best food you ate during your visit to Sydney?

Amazing noodles: burnt-miso ramen at Gogyo in Surry Hills, chili-oil wide noodles at Xi’an Biang Biang, and kanom jeen at Caysorn Thai. The chocolate miso cookie at Edition Coffee Roasters was awesome. And, for breakfast, there’s nothing better than a flat white and a BBQ bacon-and-egg roll from Single O.